London

How the regional gap in UK house prices has widened over the last 10 years

2015-04-01T05:00:00Z

And the critical importance of boosting supply

New research from JLL Residential has underlined the critical importance of boosting UK housing supply, particularly in London.

Nick Whitten, Residential Research Associate Director at JLL said: “The gap between the average price of a London home and the average across England and Wales has widened significantly over the last 10 years. In February 2005, the average London home was priced at £276,000 while today it is over £460,000, an increase of 68.3%. By contrast, the average across England & Wales ten years ago was £156,000, while currently it is £180,000, a rise of 15.7%. The average price across the Midlands, the North and Wales collectively is actually 2.5% below what it was 10 years ago.

“Much of that increase in London can be attributed to the strength of the Capital’s economy throughout the recession. Despite recent market softening due to Government elections and property taxation proposals, there continues to be strong fundamental underlying demand for London residential property.”“Transactions meanwhile are below what they were ten years ago across all areas. The UK is facing a critical housing shortage with demand vastly outstripping supply. In London, for example, the population has increased by over one million during the past 10 years and at 8.5 million people, the Capital is now the largest it has ever been in its history. However, during that period circa 20,000 new homes have been built per annum, less than half the Greater London Authority’s target delivery rate of 42,000 per annum.”

Commenting on the national picture, Adam Challis – Head of Residential Research at JLL concludes: "The balance of UK housing market strength is more nuanced than is often characterised. It is quite possible that the tide will turn again in 2015 to once again favour the North, although all regions of the UK are expected to perform well this year."